A man took a denial of a claim under a private jewellery and valuables insurance policy held with Lloyd’s covering the cost of a watch insured for the sum of $39,225.00 to the Australia Financial Complaints Authority for determination.

The man had taken the watch off and placed it in his car’s centre console. He had hidden it in the car prior to attending a shop and spending the afternoon sightseeing at a number of locations.

The man arrived home at around 5pm with his partner and when he tried to locate his watch where he left it, but found it was missing.

He then reported the theft to NSW Police and lodged a claim under his insurance policy.

The insurance policy held with Lloyd’s included an exclusion relating to the loss or theft of the watch which stated as follows:

Safe / Worn Clause – Applicable

The following is included in the policy:

We do not cover loss of or damage to Your Valuable Article caused by theft or disappearance unless at the time of such loss or damage Your Valuable Article(s) is (are):

  1. Being worn or carried by You;
  2. Being attended by You and remaining under Your immediate supervision and control, or the immediate supervision and control of a responsible adult authorised by You; or
  3. Deposited in a locked safe or bank / safety deposit vault. This exclusion does not apply to Valuable Article(s) with a combined value of up to $10,000.

Lloyd’s proceeded to deny the claim based on the fact that the watch was not stolen in the context which the policy responds to. The watch was not taken from the man whilst he was wearing or carrying it and was not in his immediate possession or supervision.

The Australian Financial Complaints Authority (AFCA) upheld the denial by Lloyd’s, and confirmed that they were entitled to rely on the exclusion noting that items that are valued over $10,000.00 must be supervised by the insured.

In this scenario, it was not clear when the watch was stolen due to it being left in the vehicle unsupervised and could have been at any point in the afternoon. There was no evidence provided to AFCA as to how the vehicle would have been accessed or any signs of entry by way of force.

Given these factors and the nature of the loss was explicitly excluded from cover in the policy, AFCA was satisfied that the insurer could decline the claim based on the policy exclusion outlined above.

The watch owner also alleged that the broker had not explained the conditions that limited his coverage under the policy. However, it was found that the broker had specifically referred to this limitations and requested the watch owner to read the documentation prior to entering into the policy.